Hurricane Sandy has made landfall. Its winds have pushed a lot of water inland, and combined with heavy precipitations, flood damages are likely to be very important.
Who will pay for your losses?
The answer is it depends on whether or not you have flood insurance covering your property.

Warning: your traditional homeowner insurance coverage DOES NOT include flood risk. Unless you have an additional flood insurance policy (sold by your insurer on behalf of the federal government), then you are on your own, more or less.

In the coming days you might want to turn to the federal government for disaster relief, but it is likely to be limited. Indeed, in the immediate after-math of the catastrophe, the media will likely announce large figures for disaster relief (“State A will receive $X million, State B even more”). The reality so it that most of this aid will go to state government to rebuild public infrastructure, not to you as individual.

There are two programs you can apply to for aid.

Program 1 is FEMA’s individual assistance. The grant (free money) is limited to about $30,000.
Program 2 is the Small Business Administration low interest disaster loan program. But whatever money you can get from this program, you will have to pay it back to the government, plus interest.

Experience from most recent disasters in the United States shows that many people living in flood zones (which include beach fronts and area next to rivers) have not purchased flood insurance coverage. Hope you have.

Feel free to contact Dr. Michel-Kerjan at: for questions.